Getting in and getting out

On the outside edge of Glovertown, there is a concrete relic of huge proportions: a paper mill that never was. It’s a massive building, stretched out in trees and shrubs that close in tight on the sides, bereft of windows but with huge concrete smokestack towers at one end.

It’s a spot that gives off a combined air of failure and menace — something about the empty eye-socket windows, the many drooping rusting metal window frames, and the sign that warns you to stay back at least 25 metres to avoid the risk of being hit by falling debris.

Much of the structure is covered with graffiti — it seems to be the place to go if you’re young in Glovertown and armed with a can of spray paint, especially bright spray paint.

The names are like a cross-

section of the town’s youth, a rite of passage that includes taking absurd risks to put your name on the highest possible bare girder — a process that includes climbing a vertical row of rusting anchor bolts that offer only the smallest amount of purchase. It is the kind of risk/reward that only the young — convinced of their own invincibility or perhaps unaware of their mortality — would see as a worthwhile effort. Inside, the building has all of the concrete pads and bases needed to anchor the paper-making machines that didn’t ever arrive, including service corridors and access points that would have been needed to keep the machines operating almost full time.

The inside of the building is also coated with paint, essentially as high as hands can reach, the ceilings black with the soot of hundreds of bonfires, the ground carpeted with a brittle reptilian scale of tiny broken glass shards, the skin of a Gila lizard made out of brown and green sparkling beads.

But hey — that’s the end result for abandoned buildings everywhere, right? First a slide into petty vandalism and access by trespassers, a broken door here, a pried window there.

Except this building never actually reached that point. The idea fell apart before the project was even completed, the investors pulling the plug and cutting their losses.

It’s a tough realization to make, an even tougher business decision to justify. Why? Because it means admitting that your plans were

mistaken, that things went awry, that the fundamentals may have changed in midstream in a way that you didn’t expect, that you were — wait for it — wrong.

It also can mean kissing goodbye millions of dollars of investment — money that company executives were charged with protecting in the first place.

At the same time, it’s a crucial business decision to be able to make, and a crucial measure of the business acumen of the people involved.

What matters in that particular business equation is the company, its investors and its customers.

What doesn’t matter — or shouldn’t matter — is the ego of its executives.

And perhaps that’s why businesses are better at business than politicians and Crown corporations are — they have a different understanding of what an investment actually is. An investment, unlike the myriad of government news releases that tout “investments” in fire trucks and playgrounds, is something that actually garners a return. And that’s a cash return, not votes in an election.

For politicians, a loss of face, regardless of the costs of stomping forward when business cases change, is somehow worse than a loss of money.

That’s why the concept of

governments being more “businesslike” is something of a joke. The heads of businesses report regularly to their shareholders, and have quarterly and annual targets to meet.

They have to plan for the long-term future of their companies, not the short-term benefits of winning the next election.

Some commenters had a big problem when, a few weeks ago, I suggested that the provincial government is in too deep to walk away from Muskrat Falls.

It is, unfortunately, true. If the provincial government was a business like Fortis, for example, it would be regularly reviewing projects like Muskrat Falls to ensure that they were the best thing for the company. If it was Fortis, the equation wouldn’t include whether or not the project was the best thing for the future of Fortis head Stan Marshall.

That’s not the math the province is using.

In the absence of a cataclysmic collapse of financing, we’re getting a dam and transmission line.

There’s a haunted concrete hulk on the edge of Glovertown that repeats, year after year, that you have to know when to hold them, and know when to fold them.

It’s just that the provincial government is playing a different kind of game. And, more importantly, the money they are playing with is not their own.

Excellent column. If Nalcor had followed their own gated management process this project wiuld not have passed their decision gate 2 in august 2010. Readers should review Exhibits 20-22 on the PUB website. Their DG2 assessment was a readiness review only. Their was no review of alternate sources of energy. There was also no review of the project economics. The only reference to markets, was that it was not going to be an issue to get a PPA with NL Hydro. When the mandate changed from developing the lower churchill, to meeting NL's power needs there should have been a full stop. The project should not have passed DG2 back in 2010. if Nalcor would have followed best practices, we would not be in the precarious place we find ourselves today. The project would have been suspended with much less exposure. The media should ask for Nalcor's management of change paperwork which would have recorded this very important shift in the project rational in 2010. This decision is when things started to derail, 3 years ago. That is the difference between crown corporations and real business.